The 80-20 Rule Of CMO Promotions Helps Explain Why Marketers Are Seen As Being Too ‘Jumpy’
Non-marketers often think that CMOs change jobs too much. Though there are several factors that come into play, at Russell Reynolds we’ve uncovered one possible reason for this “ jumpiness.” We’ve found that marketing leaders have only a 20% chance of moving into the CMO role at their existing company. Once appointed as CMO, s/he has only a 20% chance of being internally promoted to a broader role within that company, such as GM or President. This means that 80% of all marketing moves happen only by moving to a different company – basically, implying the need to “ jump” jobs to get ahead. For a complete list of all of the 396 marketing moves reported in 2018, please visit here.
- CMO succession crisis persists. Nearly 80% of publicly reported chief marketing officer appointments in 2018 were external hires, consistent with the previous year. Just one of every five new CMOs came from within the ranks, which paints a grim picture of internal development processes for marketing talent.
- Among sitting CMOs, nearly 80% have left their respective company to advance their career. There is little chance of sitting CMOs being internally promoted into a broader role.
- Record turnover continues. In 2018, we tracked 396 publicly-reported CMO moves in the United States and Canada. This is the highest number we have observed since we began tracking this data in 2014. In 2017, there were 377 CMO moves and 350 in 2016.
- Gender diversity growth is stagnant. Forty-two percent of 2018 CMO appointments were female, which is relatively constant over the last three years.
- Healthcare companies go external almost exclusively. Ninety percent of healthcare CMO appointments were external hires in 2018. While healthcare organizations have historically steep rates of appointing outside CMOs – 79% in 2017, 76% in 2016 and 71% in 2015 – this was a new high.
- Inter-industry mobility showing mixed results. Last year, 31% of external CMOs came from a different industry, up from 27% in 2017, but down from 33% in 2016 and 35% in 2015. The consumer and technology industries remain most likely to hire marketing leaders from within their respective industries. Industrial & natural resources organizations are increasingly following their leads. Within healthcare, despite an overwhelming proportion of external CMO appointments, only a slight majority came from a different industry (58%).
- Marketers moving on up. Sitting CMOs are moving into general manager, president and CEO roles at higher rates than ever before, suggesting the CMO has increasingly gained commercial and strategic impact. Though a slightly greater proportion of CMOs stepped into the aforementioned P&L roles at a new company rather than at the same company in 2018 – 19 versus 17% – the overall number of CMOs moving into these larger roles (36%) is up from 32% in 2017 and 19% in 2016.
Industry Breakdown of Marketing Moves
The consumer industry accounted for 54% of the marketing-leadership turnover in 2018, up from 52% in 2017 and 51% in 2016. In 2015, the consumer digital and media sector had over twice as many moves as the retail sector, but three years later, retail has surpassed consumer digital and media in CMO turnover. This demonstrates the increased volatility among retail marketing leaders in the past couple of years, as the industry seeks to redefine itself. The consumer products & services sector had the largest year-over-year increase from 9% in 2017 to 13% in 2018.
Since 2015 the technology industry has fallen five percentage points in terms of marketing move-share, while the healthcare industry has gained four percentage points.
Internal vs. External Hires
The trend of externally hiring top marketers continued strongly last year as external appointments accounted for 74% of all marketing moves (and 79% of all marketing leader appointments). This mirrored 2017 levels and increased from 2015 and 2016. With just one of every five CMOs appointed from within the organization over the last two years, there is a clear CMO succession crisis across industries.
Since 2015, healthcare companies have been increasingly looking for marketing leadership outside of the organization. Last year, they did so 90% of the time, a sizeable increase from 79% in 2017. Looking over the last four years, the healthcare industry has an 82% external appointment rate for CMOs. Contrarily, the industrial and natural resources industry saw a sizeable decrease in external marketing-leader appointments from 2017 to 2018 – 81% to 63% – which is consistent with the number in 2016 (60%).
Regarding internal appointments, the average tenure within an organization prior to promotion to the CMO role increased in 2018 following several years of decline. Across all industries, the average internally-appointed CMO spent 9.1 years at their respective company prior being promoted into the role. This is up from 7.4 years in 2017 and 8.2 years in 2016, but down from 10.7 years in 2015. Later in this report, we look at the average tenure in the CMO role prior to promotion or departure.
Inside of Industry vs. Outside of Industry Appointments
In today’s age of disruption and transformation, it is reasonable to expect that more companies would be open to hiring marketing leaders with different perspectives from other industries. Though the overall numbers demonstrate a slight increase in this tactic – 31% in 2018 versus 27% in 2017 – few industries have made a significant shift in this direction and some are moving in reverse.
When looking outside of the organization, consumer and technology businesses have maintained a strong tendency to appoint CMOs from companies within their respective industries. Consumer companies hired marketing leaders from outside the industry 22 percent of the time in 2018 and 19% over the last four years. Technology organizations did so 29% of the time in 2018 and 28% over the last four years.
The industrial and natural resources industry has seen a massive decrease in appointing CMOs from outside of the industry over the last four years. In 2015, 83% of new CMOs came from outside the industry and it has decreased every year since, down to just 40% in 2018.
There was a slight decrease in healthcare marketing leaders coming from different industries, as well. In 2018, 58% of healthcare companies appointed CMOs from outside of the industry, down from 73% in 2017, 77% in 2016 and 60% in 2015. However, in the last four years, the healthcare industry has the highest rate of cross-industry CMO appointments at 64%.
Inside of Sector vs. Outside of Sector Appointments within Consumer
Consumer-facing companies have continuously had a majority in overall marketing moves. Taking into account the individual sectors – apparel / retail, consumer digital and media, consumer products and services, and leisure and hospitality – 54% of external marketing-leader appointments within the consumer industry came from a different sector. This is the highest proportion we have recorded since 2015.
The apparel/retail sector is the only one in which the majority of new CMOs did not come from another sector – yet the 47% posted in 2018 shows a steady increase from 2016. One of the most surprising trends was among consumer products and services organizations. Though they are known for grooming marketers into future CMOs, 58% of their external CMO appointments came from a different sector in 2018, a large increase from 27% in 2017 and 24% in 2016. The result of CPG companies needing to quickly reinvent themselves is being seen in the non-CPG talent they are aggressively hiring into marketing leadership roles.
Where Do Sitting Chief Marketing Officers Go?
Marketing leadership appointments show one side of the story for chief marketing officers, but it is also interesting to see where siting CMOs go after they leave their role (i.e., joining a new company, being internally promoted, retiring, consulting/advising or undisclosed). To gain more insight into next steps for marketing leaders, we tracked and analyzed the career paths of 82 outgoing CMOs in 2018, for a grand total of 314 since 2016.
Over the last three years, 54% of those CMOs are now at a new company, while 19% were promoted within their respective companies. In 2018, however, 22% were promoted, which is an increase from 20% in 2017 and 15% in 2016.
In general, a marketing leader has approximately a 20% chance of getting the CMO role at their company and once appointed as CMO, s/he has around a 20% chance of being internally promoted to a broader role. Overall, 80% of marketing moves happen externally.
Tenure for CMOs dipped in 2018, both for those who left their company and for those who were promoted. Overall, the average tenure for outgoing CMOs last year was 3.2 years, down from 4 years in both 2016 and 2017. For those who joined a new company, the average CMO tenure was slightly lower: 2.9 years in 2018 – down from 3.2 years in 2017 and 3.7 years in 2016. Promoted CMOs have a higher average tenure but saw a similar year-over-year decrease to 3.6 years in 2018 from 41 years in 2017 and 4.4 years in 2016.
Among the outgoing CMOs who joined a new company, the majority continue to take another marketing job. This demonstrates the “repetitive CMO cycle” of marketers getting stuck in the top marketing role at different companies.
As noted previously, however, bright spots include a relatively big increase in those being appointed to a general manager, president or chief executive officer role at their new companies – 28% in 2018, up from 23% in 2017 and 17% in 2016. We also observed a slight increase in those stepping into a digital role – 6% in 2018, up from 5% in 2017 and 2% in 2016.
Among the CMOs who were internally promoted, half of them were promoted to a president or general manager role in the last two years. Additionally, both digital roles and strategy and innovation roles have been an increasingly common next step for CMOs, as each consisted of 17% of CMOs who were promoted in 2018.
Given that most organizations need customer-centric leadership to help them stay ahead of the rapid pace of change, marketers seem to be emerging as more attractive candidates for broader roles. Both through internal promotion and external appointment, outgoing CMOs were appointed to general manager, president and chief executive officer roles more than ever before in 2018, suggesting the CMO has increasingly gained commercial and strategic relevance.
In 2018, 36% of sitting CMOs’ next job was a general manager, president and chief executive officer role – up from 32% in 2017 and 19% in 2016. Although a slightly higher percentage of CMOs stepped into the aforementioned P&L roles at a new company rather than at the same company, – 19 versus 17% in 2018; 16% versus 11% over the last three years – the year-over-year increases suggest that the odds of breaking out of the “repetitive CMO cycle” are trending in the right direction for marketers.
See below for details on the full list of marketing moves from Q3-Q4 2018. For details on the moves from Q1-Q2 2018, see our previous report from August 2018: Want to be a CMO? Odds are you’ll need to change companies, as the “CMO Succession Crisis” continues.
For a complete list of all of the 396 marketing moves reported in 2018, please visit here.
In the meantime, here are some notable marketing officer moves from last year:
Burberry has appointed Rod Manley as chief marketing officer. Manley is responsible for marketing, communications and creative media. He most recently was executive vice president, influence marketing and communications, at Calvin Klein.
Levi Strauss & Co. has appointed Jen Sey as senior vice president and chief marketing officer. Sey most recently was chief marketing officer, global brands, at the Company.
Petco has appointed Tariq Hassan as executive vice president and chief marketing officer. Hassan most recently was senior vice president, enterprise brand strategy and insights and head of marketing, Wealth Management, at Bank of America Merrill Lynch.
Walgreens Boots Alliance has appointed Vineet Mehra as global chief marketing officer. Mehra is responsible for all marketing activities, fostering global marketing collaboration across business and geographies, overseeing the design and execution of the Company’s global brand image, messaging and positioning and developing the customer value proposition. He most recently was executive vice president and global chief marketing officer at Ancestry.
Airbnb has appointed Geoff Seeley as global marketing director. Seeley most recently was director, global marketing, connections & media activation, at the Company. Additionally, Airbnb has appointed Musa Tariq as global head of marketing, Airbnb Experiences. Tariq most recently was chief brand officer at Ford Motor Company.
Lyft has appointed Joy Howard as chief marketing officer. Howard most recently was chief marketing officer at Sonos.
Tinder has appointed Jenny Campbell as chief marketing officer. Campbell is responsible for defining a sustainable global framework focusing on brand strategy, public relations, creative and campaign activation. She most recently was managing director, Los Angeles, at 72andSunny.
Anheuser-Busch InBev has appointed Pedro Earp as global chief marketing officer. Earp most recently was chief distributive growth officer and head of ZX Ventures at the Company.
Clorox has appointed Stacey Grier as chief marketing officer. Grier most recently was vice president, brand engagement & enhanced wellness marketing, at the Company.
he Honest Company has appointed Shannon Pruitt as chief marketing officer. Pruitt is responsible for overseeing brand marketing, creative, content and marketing communications. She most recently was chief content officer, Carat USA and president, The Story Lab, at Dentsu Aegis Network.
Buffalo Wild Wings has appointed Seth Freeman as chief marketing officer. Freeman is responsible for leading brand experience, culinary, advertising and digital. He most recently was head of global marketing, Holiday Inn, at InterContinental Hotels Group.
National Football League has appointed Tim Ellis as executive vice president and chief marketing officer. Ellis is responsible for leading the marketing organization, including research, content development, consumer engagement, advertising, promotions, marketing operations and branding. He most recently was executive vice president and chief marketing officer at ActivisionBlizzard.
JPMorgan Chase has appointed Leanne Fremar as chief brand officer. Fremar most recently was senior vice president and executive creative director at Starbucks.
Abbott has appointed Melissa Brotz as chief marketing and communications officer. Brotz most recently was divisional vice president and head of public affairs at the Company
Merck has appointed Michael Nally as chief marketing officer. Nally is responsible for global marketing and long- term franchise strategy across the portfolio. He most recently was president, Merck Vaccines, at the Company.
FedEx has appointed Brie Carere as executive vice president, chief marketing and communications officer. Carere most recently was senior vice president, global portfolio marketing, at the Company.
ADT has appointed Jochen Koedijk as chief marketing officer. Koedijk is responsible for delivering innovative digital and brand marketing strategies and initiatives. He previously was head of worldwide social & new channel advertising at Amazon.
HP has appointed Vikrant Batra as chief marketing officer. Batra most recently was global head of marketing, Printing, at the Company.
By Norm Yustin